SUBJECTS: REPORT OF PRESIDENT'S WORKING GROUP UNLAWFUL
INTERNET CONDUCT

ADDITIONAL SPEAKER: JOHN RYAN, ASST. GENERAL COUNSEL, AMERICA
ONLINE

U.S. DEPARTMENT OF JUSTICE, WASHINGTON, D.C.

THURSDAY, MARCH 9, 2000

9:31 A.M. EST

ATTY GEN. RENO: Good morning.

I am joined today by Secretary of Commerce William Daley and
assistant general counsel of America Online John Ryan
to talk about the report of the president's working group on
unlawful conduct on the Internet.

In August of 1999, President Clinton asked me to chair an
interagency working group to analyze the legal and policy
issues created by unlawful conduct on the Internet. Today the
working group, with industry support, is issuing its report.

The Internet has provided our world with unparalleled
opportunities, many of which we are just discovering and probably
many yet to come. At the same time, the Internet is providing
criminals a vast inexpensive and potentially anonymous way to
commit crime. How we respond to these challenges posed to law
enforcement will be critical to public confidence in this

wonderful medium. Our working group analyzed this potential for
criminal behavior and reached three conclusions:

First, existing laws in the physical world that apply to
illegal activities, such as fraud and possession of child
pornography, should apply equally on the Internet. That means we
can, and we should, use existing laws to prosecute most
unlawful conduct on the Internet. And we must ensure that
regulation of unlawful conduct on the Internet is treated in the
same
manner as off-line conduct, is technology-neutral, and is handled
in a manner that takes account of other very important
interests, such as individual privacy.

Secondly, law enforcement faces significant investigatory
and procedural challenges in combatting unlawful conduct on
the Internet.

These challenges include the inability to trace criminals
who hide their identities online, difficulty in finding criminals
who might be located in other jurisdictions, the need for better
coordination among law enforcement agencies, and the need
for trained personnel at all levels of law enforcement.

In addition, the working group identified several areas
where legal authorities and tools needed to combat cybercrime are
insufficient. We recommend that the laws relating to the
investigation and prosecution of high-tech crimes be evaluated,
to
ensure that they keep pace with technological and social changes.

Third, there should be continued support for private-sector
leadership, to promote cyberethics, to minimize the risk of
unlawful activities on the Internet.

These interests, if addressed properly, are not
inconsistent, but they are mutually reinforcing. And they can
result in
consumer confidence, ensuring that the Internet is a safe and
secure medium for facilitating commerce, expanding
communications too, and bringing countless benefits to our lives.

The Federal Trade Commission, the Department of Treasury,
and other agencies have been vital partners in this effort,
and I want to thank them.

And now it is my pleasure to ask Secretary Daley to discuss
his thoughts on the report.

SEC. DALEY: Thank you very much, General. And Mr. Ryan,
thank you for having us here together for the issuance of this
report.

When we began preparing the report, the issue before all of
us was whether our existing laws were adequate to protect
online activities. I think the report concludes that in most
cases our laws do work. So the issue has become whether law
enforcement has the tools and resources and also the proper
training to fight new criminal behavior. Obviously, the attorney
general feels that we do need more resources. And just as
importantly, we need to figure out how to give law enforcement
the
tools in a way that is not harmful to the Internet and obviously
not intrusive to business. We absolutely have a need to do this
right.

As we have said many times, if e-commerce is to meet its
potential, people must trust the Internet, or they will be
reluctant
to continue to do business over the Internet. We've spent a great
deal of time working on privacy and consumer protection
concerns, but to be frank with each other, what is an even more
basic concern to consumers is the issue of security.

In my opinion, businesses must step up their own efforts to
make the Internet more secure and not wait for cybercops to be
expanded. After all, networks are in the hands of the private
sector. It is the private sector that has made the most progress
of
information technologies, and there are things, as the report
concludes, which businesses can do to make the Internet safer.

Let me just highlight three of them.

First, businesses should continue to develop initiatives to
protect consumers and children online. Companies have
developed technologies that block things that none of us would
want our young children to see. Many organizations have
developed educational programs aimed at instructing younger
Internet users about online citizenship. There are programs that
advise parents in how to protect their children online, and we
need to see more of these activities.

Second, businesses need to cooperate with law enforcement
agencies more often. We are not asking businesses to be
online cops, but we want them to be online Neighborhood Watch
groups. They can do for the Internet what neighbors do for
each other in every community of our country. That is, making
their community safer by keeping an eye on each other. I think
they should share their experiences and technologies with law
enforcement. This is not easy, and there will obviously be
concerns about protecting proprietary information.

Well, one of the major reasons for our success in addressing
the Y2K problem is that industry and government came
together and made it work. I think if companies can help nail
hackers who threaten our networks, it's not just good in fighting
crime, but it is good for the future of e-commerce. A number of
e-businesses have developed channels of communications
with law enforcement of efficient procedures to process their
requests. They have also been educating their employees about
how to recognize unlawful conduct on the Internet. These
practices should become standard operating procedures for all
businesses who do business online.

Finally, let me say that in 1997, President Clinton and Vice
President Gore made the right choice when they came out for
the first policies on e-commerce, and that first policy was that
the private sector should lead. Some things, obviously,
deserve protection as a matter of law, but one reason the
Internet has been so successful is that government has avoided
regulation that would have messed things up. The Internet and
e-commerce are changing so quickly, we must continue to work
together, employing all of our talents and experiences to ensure
its successful and continuing growth.

This report sets an agenda of issues that we must address
together as the Internet grows even more important in each of
our lives, important not only for business, but for education,
communication and entertainment.

So we look forward to working with the attorney general and
the private sector to find ways to implement these
recommendations.

Thank you, Janet.

ATTY GEN. RENO: Thank you.

Q Mr. Ryan, what about the issue of anonymity? How important
is that to Internet service providers? And should there be
some way that law enforcement can penetrate the anonymity for
anyone who uses the Internet?

MR. RYAN: Well first, let me preface my remarks by stating
that, on behalf of America Online and my industry
colleagues from the Internet Alliance and the Information
Technology Association of America --

Q (Inaudible) -- pardon me. Could you --

MR. RYAN: Yeah?

Q -- lean forward so --

MR. RYAN: Yes, sir.

Q -- the camera can see you?

MR. RYAN: The industry would like to commend and thank the
efforts of the entire working group, in particular the
agencies, the Department of Justice and Department of Commerce,
in the thoughtful and comprehensive treatment that is
reflected in this report.

As this report indicates, this report is not meant to offer
specific recommendations but rather a framework to continue the
dialogue between the existing partnership that exists between
private industry and the governmental agencies that have an
interest in promoting a safe and secure experience.

Anonymity is one of the issues that this report deals with.
But it specifically leaves to further dialogue a more
comprehensive and thoughtful discussion of how to balance the
privacy interests of those who use the interactive service, as
well as those who seek to abuse it. So rather than deal with
specific comments on the issue of anonymity, I think we are
prepared today to commit ourselves to continue with this
dialogue, between industry and the public safety, to make sure
that
all the important issues that are raised in this report are dealt
with.

Q Well, speaking of dialogue, what is -- just to engage in a
little here -- what is the industry's view about anonymity?

Should it be preserved on the Internet? Or should there be a way
for law enforcement, with proper court orders or subpoenas,
or whatever, to pierce that anonymity, if they feel they need to?

MR. RYAN: First, this report reflects that there are
existing statutes, notably the Electronic Communications Privacy
Act,
that sets forth the guidelines that exist, whenever law
enforcement seeks to acquire information or data from an Internet
service provider or a member who uses that service.

So there are existing guidelines that safeguard both the
privacy interest and the legitimate needs of law enforcement when
they need to investigate instance of abuse.

So we are not looking -- and we commend this report for not
looking to create necessarily new laws. We point to existing
safeguards that promote both public safety concerns as well as
the privacy interest.

Q Ms. Reno, on the --

Q One more on this subject: Does the industry collect the
data necessary to answer those questions when law enforcement
comes knocking? Is the industry pretty good about collecting at
some point information on who is using generic names on the
Internet?

MR. RYAN: You must recognize that there are different
business models that are involved in terms of those entities who
engage in business on the Internet. There is no single business
model that is engaged in or adopted by all the various entities.

So that question is left to each individual company to serve the
interests of their subscribers, as well as whatever is the best
business model.

Q Ms. Reno, when the National Infrastructure Protection
Center was established a couple years ago, as I recall, you and
Mike Vatis talked about particular investigative and
prosecutorial guidelines for this brave new world, similar to the
department guidelines that it uses in the physical world. Were
these guidelines peculiar to the Internet or peculiar to
cyberspace ever developed, or --

ATTY GEN. RENO: We're in the process of trying to figure out
what guidelines should apply. As I have mentioned to you
and as we have discussed with industry, we're going to be having
a conference -- hopefully one on the West Coast and one on
the East Coast -- with the industry and others who are concerned,
to hear from them about what we can and can't do, should
and should not do, and how we can develop the partnership with
industry that is so vital. I don't want to put anything in stone
until I make sure that I have heard from everybody concerned.

Q Ms. Reno, you used the term "cyberethics." What are they,
and who determines the standards for -- the ethical standards
here?

ATTY GEN. RENO: I don't mean to be repetitious, but I think
the best description was from the gentleman who knows an
awful lot about cybertechnology, pointed out to me that his
13-year-old daughter knew not to open other people's mail, not to
go in somebody else's room and rummage through their desk, but he
wasn't sure that she knew what to do not to do on the
Internet.

And it is to carry forward our ethics of the physical world
into the Internet, so that people can have an understanding of,
"You don't do this, you can do this, this is permissible, you'd
better watch out if you do this."

Q Ms. Reno, pornography taints the Internet, and I would ask
Secretary Daley to ask what kind of measures -- are there
active measures to take down this porn? We know that there are
measures to protect children and, you know, household
users, but what would -- what would you recommend to Ms. Reno and
vice versa on this particular matter?

SEC. DALEY: Well, I wouldn't be recommending any legislation
or action. Obviously, if criminal activity is going on
around pornography using, whether it's the Internet or
non-Internet, law enforcement has a legitimate right to take
action as
they do and as they do often. But what we have spent three years
doing is encouraging industry -- and they have moved very
aggressively to create the technologies so that people can
protect their children, and those adults who want to engage in
those
activities that are legal, they have every right in the world to
do that, and n o one is talking about taking action in that area.

But industry has stepped up, and it was a result of a
significant movement by not only the political establishment, but
by
normal people out in America in response to -- at the beginning,
even in the first year, three years ago, that I was engaged in
these issues as secretary, like 80 percent of all comment about
the Internet in media was about pornography, and about the
explosion of that. That's not written about much any more, and I
think that's a combination of, one, real technologies have
been developed that parents are taking advantage of so that their
concerns of a few years ago have been addressed, and at the
same time, the explosion in so many other areas of the Internet
that have overwhelmed that small piece of the Internet that was
so prominent a mere three years ago.

Q Do you feel that there is a legitimate place for
pornography on the Internet?

SEC. DALEY: Well, the courts have said there's a legitimate
place for those activities in our society, as long as they're
within the confines of the law, whether it's on the Internet or
off the Internet.

ATTY GEN. RENO: I think the report's basis is existing laws
in the physical world that apply to illegal activities, should
apply on the Internet. And it is clear that we have put a lot of
time and effort into child pornography on the Internet, through
the Innocent Images Program, and otherwise. But that is the basis
of this report. It doesn't pass judgment on the physical
world; but it says, "If it applies in the physical world, it
should apply on the Internet."

Q Let me just make one clarification. So does this report --
or are you advocating any new laws that would be even
stronger than -- (inaudible) -- or simply proper enforcement of
existing laws on the Internet?

ATTY GEN. RENO: What we are talking about is let's use,
substantively, the laws that exist in the physical world and
apply them to the Internet, and let's be technology-neutral. But
let us recognize that there are investigatory steps that may need
to be taken to effect the same result as in the physical world:

Let us discuss those. Let us understand what the balances
are. Let us sit down with industry. Let us hear from the privacy
groups. And let us see how we balance the interests, which exist
day in and day out, for all of law enforcement: When can
you take action and when can't you?

Q So it's really more -- to the extent that you'd need
improvements in the laws, it would be in the procedural type
elements
of the law --

ATTY GEN. RENO: Yes.

Q -- for example, how to do trace work and that sort of
thing -- multijurisdictional law and that sort of thing?

ATTY GEN. RENO: I mean, we have talked about it before. If a
man can sit someplace halfway around the world and
steal from a bank in the United States on his computer, we are
going to have to develop new ways of processing these cases
-- of working with our colleagues around the world, of bringing
these people to justice.

Q May I ask about how you might apply your thinking to two
specific problems that would seem to me very important for
investor and consumer confidence in the growing e-commerce world?

Specifically, we have seen some things in the news lately
about people who hack into e-commerce sites and steal
credit-card numbers and billing information, and also people who
overload e-commerce sites and essentially sabotage them.

Those would seem like key things that could really hurt the
growth of this segment of the economy. What specific changes do
you folks want to see to better prevent that types of sabotage,
in fact?

ATTY GEN. RENO: I don't want to make specific proposals.
What I want to do is to sit down with industry, with the
privacy sector, and figure out how we deal with those issues. If
a man masks his identity, as he takes the credit-card numbers
and other identifying information and invades the privacy of
everybody in this room, everybody in this room is going to want
to know who got their credit- card number; who is using it, who
is extorting them -- whatever he is doing with it.

How do we balance that with the need for people to be able
to use the Net in a private way? Those are the issues. They
are not easy issues, but I think we're trying to effect a
discussion that can help us understand it.

Now, the best way to understand something is to not deal in
"what ifs" but to come up against the hard questions. And
what happens if you have somebody who's threatening to open a
massive dam and let water flow out that would cause
tremendous damage; he's masked his identity -- what should law
enforcement be able to do in those circumstances? What
capacity should it have to identify him, other than through
activities normal to law enforcement in the physical world? These
are the issues, and this is what the report indicates we need to
resolve.

Q In terms of --

Q Ms. Reno --

Q Can I just follow up? In terms of the time line, how do
you balance the need to think these things out well with the fact
that right now we are in what could be a key growth phase for
this industry? A lot of companies are forming, they need
capital, consumers are just shifting in here. The more you see
things in the news about credit cards being stolen or sites being
shut down, the harder it is to start up in this sort of key
growth phase.

ATTY GEN. RENO: I think Francis Thompson had the best line:
You do it with all "deliberate speed" and "majestic
instancy." (Scattered laughter.)

Q Madame Attorney General, last September the administration
announced a change in its position with regard to the
export of strong encryption. Could you comment on how that change
in policy will make the Department of Justice's life more
difficult with respect to tracking anonymous use of the Internet?

ATTY GEN. RENO: I think we are going to be able to address
the issues, particularly as we form strong partnerships
with industry, recognizing that industry should be involved, as
the secretary has indicated, in developing processes and
procedures that protect itself and the Internet from abuse, and
recognizing that law enforcement, working with industry and
having access to industrial knowledge, can do so much in terms of
avoiding the encryption and getting to the wrongdoer.

Q Ms. Reno, is it sort of extraordinary that it would --
that one of the conclusions that you have is that the law should
apply to the Internet as it does everywhere else? Why is it even
necessary to say that? And is there -- is part of the answer to
that that there's been a sort of culture developed about the
Internet that it's different, it's apart, should be hands-off?

ATTY GEN. RENO: I think it's been developed -- and the
secretary and Mr. Ryan might want to comment -- because law
enforcement got into it and said, "Oh, we need this and this and
this," not recognizing that here is a new tool that, if properly
used, can be a tremendous benefit to all, but that again we have
got to have some processes that protect people. And the more
we have seen of examples of abuse of the Internet that have hurt
people, the more everybody comes to realize that industry
must do so much, as has been indicated, to address the issues.

I think there are still some that -- perhaps it's a little
like the wild West in the development of America -- who say, "Let
not government be involved." But there was also the marshals and
Wyatt Earp and others who brought some order to it.

And I think what we're faced with here is the -- something
that I suppose humankind has dealt with throughout the history
of the world. You don't like people telling you what to do, Pete.
And there are going to be times when somebody tells you
what to do, and you take issue with it and contest it. And then
there are going to be other times you say, "Well, they were
right." But there is just an instinct in us all to be free, and
yet a recognition on the part of all responsible people that we
have
got to be accountable to each other.

What we're doing on the issues of law enforcement and what
this report indicates -- this is a wonderful new medium, and
we're going to have to take the lessons we have learned from all
of time on how we balance freedom with accountability and
apply it here.

Q Can we look at the opposite side of the coin? Secretary
Daley, in your remarks in particular -- the Internet has a great
deal of energy, a great deal of creativity. It's one of the
engines driving the current economic boom. The tenor of your
remarks
seemed to be that we have to do certain things, but above all,
let's not do -- or let's do no harm.

Let's not do anything to blunt the vitality of this new
medium.

SEC. DALEY: I would say that's accurate, but that doesn't
mean you don't do anything. And in answer to your question, the
previous question, I think, you know, a mere seven years ago,
there were only five websites in existence. This whole medium
has just exploded in an incredible, short period. And we are, as
government, and we believed, and as I said, President
Clinton and Vice President Gore's policy of 1997 in that the
private sector should lead, and the times they've only led by
virtue of the fact that they've been kicked a little by
government or the fear that if they didn't do something on
privacy -- and
three years ago there were very, very few if any privacy policies
being put on the website; today, while over 80 percent, I
believe, of the websites have a privacy policy that is clear and
put forward in a fairly visible way for the users of the sites --
that's progress.

But I think it is, as the general has stated, it is a
balance and it is trying at the beginning, when I think if
creative people
saw the enormous potential, they were maybe overly concerned
about any sort of regulation and any government involvement,
as they should have been, because it was very much in an infancy
stage. I don't think anyone would say that we are still in an
infancy stage of the growth of information technologies. What we
are coming to grips with as government is that this is going
to be probably continuing this enormous rapid pace of progress
that makes it difficult for us to respond.

But we have to, as the general also stated, this report and
the conclusion of the report is that we have to work with the
private sector closely to identify ways that we can solve some of
these problems for the good of the general public and for
the good of e- commerce, so that people's confidence and faith as
we all -- a few years ago, you know, it was really up to you
whether or not you wanted to play in the game of the Internet and
these new technologies. Today, you don't have a choice.

You're in there.

Q Ms. Reno, to what extent are these turf fights hampering
your efforts to police the Internet? There are some reports about
the Treasury Department, Transportation, and the Secret Service
not participating in NIPC in ways that they -- in the full way
that they could be. What's your feeling about that?

ATTY GEN. RENO: I think we are working well together. I
think we are trying to develop the capacity and understanding
of how we work together. If you had -- Commerce and Justice have
had tensions over time. But as we work through the
issues, as we understand better, as we see each other's roles, I
don't foresee that these should be roadblocks at all.

Q Why aren't the agencies participating with NIPC?

ATTY GEN. RENO: Probably because of funding issues. And they
are prioritizing things and feel like, with what have
going, they can be a phone call away or an e-mail away. At any
rate, these are issues that we have to build on. And as we
develop and identify needs, we need to take action.

Q Ms. Reno, with regard to "people's desire to be free" that
you referred to, do you disagree with the statement that
individuals should be allowed to communicate anonymously using
the Internet, so long as they are not committing criminal
activity?

ATTY GEN. RENO: I don't do "what ifs" because I don't know
what "so long as they are not committing criminal
activity" means and I'd like to take it on a specific basis.

But I just think, again, the basis of this report is, "Let's
sit down and talk about it and try to come up with answers."

That's what we did on the issue of encryption. And we had an
excellent meeting with industry. They gave us new
information. We agreed to be a better partner. And I think we can
do it here.

Q Ms. Reno, something that civil libertarian critics have
said, that there is no real evidence and widespread criminality
on the Net, particularly in this report. So why address this now?
Is this just looking towards the future? Or is this in reaction
to specific criminality and growing criminality on the Internet?

ATTY GEN. RENO: I think we have seen sufficient criminality
on the Internet to be prudent and take appropriate
precautions. And rather than do it in haste, rather than do it in
a way that could adversely shape this wonderful medium for
the future, let's do it in a sensible orderly way now.

Q Ms. Reno, regardless of turf fights -- in its sort of
multijurisdictional context, does that mean there is going to be
a
growing role for federal agencies, regardless of whether the
Treasury, FBI, Commerce, whoever?

ATTY GEN. RENO: What we want to do is to work with state and
local officials and recognize that, as I have said, the
physical laws should apply on the Internet. So under our
principles of federalism should the state and local authorities
be on
the front line and have prime responsibility for the enforcement
of laws within their jurisdiction.

Obviously, state boundaries are going to be as meaningless
as international boundaries. And it is going to be important for
us to develop new procedures with respect to exchange of
information, securing witnesses' testimony and the like. But I am
dedicated to doing everything I can to ensure that, along with
privacy issues and other critically important issues, the
principles of federalism are addressed, too.

STAFF: One more question.

Q How deep is the mistrust, on the electronic world's part,
of government? How deep is it here? And to what extent has
that mistrust diminished?

ATTY GEN. RENO: You want to answer that, Mr. Ryan?

MR. RYAN: Could you repeat the beginning? How deep is the
mistrust?

Q How deep has the mistrust on the part of the electronic
world been of government? And to what extent may it have
diminished?

MR. RYAN: Well, I can only say at present times I think
that's a false premise. I think --

Q (Off mike.)

MR. RYAN: Well, my experience is limited to five years, but
that's half the life of this new medium. So I think I can still
speak with experience. I think that, again, it's a false premise,
that responsible industry leaders have worked and are
committed to working with the public sector. There is a
recognition that public safety is not an area where there should
or is
tension. It's in the mutual interest of both industry and the
public sector to promote a safe and secure environment for
everyone who uses this medium. The growth of this medium depends
on consumer trust and confidence. If we cannot --
industry cannot provide a secure environment, we cannot expect
members to engage in their everyday activities, which they
have embraced today. So I don't believe that's a true premise,
and that's not the way we interact now with the public sector.

Q So there's been total trust from the beginning?

ATTY GEN. RENO: I would sense that on the part of some
industry representatives there has been concern and -- concern
that law enforcement might try to regulate more than just
prevent. And I think the more we can build a partnership and
recognize that with cybertechnology has come an interconnection
that makes it imperative that law enforcement and the
industry and the industries served by the technology -- that we
work together as partners. And I think with that theme, the
distrust that might have existed is beginning to vanish.

Q Thank you.

SEC. DALEY: I would just say, if I could, one comment on
that. In the three years I've noticed a tremendous movement.

The suspicion, skepticism three years ago on private sector --
about any of our activities, whether it was in the encryption
area, in any -- even in a difficulty in getting them to engage
with law enforcement, quite frankly -- that's changed remarkably
over the last year or so.

It's -- the responsible, as Mr. Ryan said, companies
understand that their future is at stake, and we understand that
this is
not just a passing technology, and that the benefits are enormous
and widespread. So we've, I think, all changed.